Even though we (on our farm) don’t participate in the farm program, there needs to be a safety net for two reasons:
Everyone here likes to eat.
Also, farmers gamble thousands maybe even millions every year on factors out of their control such as weather, pests and disease.
It’s not a business for the faint of heart, which is why a lot of people are out of it and their descendents know little about it.
That said, I’m sure farm programs show that they are produced by committees. Not perfect, but, we need some kind of safety net.
This post shows me that I need to read up on the latest farm bill and probably e-mail my congressman. I might or might not agree with Tea Party thoughts on it, can for darn sure give my congressman a grassroots view of it.
I'd hate to lose the federal crop insurance. We pay for it but it's reasonable. Last year, it was $2,042, 100% hail and wind and 75% drought. Last year there was drought but we got good enough yields in spite of it that we didn't have a claim for which I was thankful.
Here's 1/2 of the cost so far this year. Am nitrate custom applied last fall they deferred payment for me to Jan, 4035.31. By Sep 1 I have to pay just under $5,000 so we can get on a fall expense cycle. Remember this is 1/2. My tenant pays the other half.
100 acres corn seed my half this spring $5,107.60. So you can see what getting wiped out with hail would entail to try to replant. Bean seed for 70.21 acres was $1,900.08. Chemicals $3,502.68. Fertilizer (in addition to the am nitrate) $3,425. Then I have property taxes due, house needs a new roof, tuckpointing in the foundation and gravel. Then I have to pay costs at the elevator. This year it was a little over $200 because I sold everything in Jan so I would have plenty of working capital to try to stay on a cash basis. Last fall the 2011 crop storage and processing was over $1500 for about 2 months, and I lost 80 bu corn due to shrink when they dried it. They will only take corn and beans with so much of a percentage of moisture content.
Now this fall we're buying everything for 2013 because we get a fall discount. I have to call and check a couple items.
So that's a little about what a small farmer deals with. Big farmers have a lot of risk, too. Even more. Grain prices have been high, I sold a little too quickly and missed the nice spike in beans to $14 bu but corn stayed fairly steady from about $6 to $6.57 bu.
I got $6.18 for my corn which was deflating because they had the wrong screen up, it's like the stock market constantly changing and I said I wanted to sell at $6.23 which is what I saw on my screen and is what I said I wanted to sell it for. When I got the papers, it was the lesser amt, I called and argued with them but gave it up rather than alienate them for the future. There are other options I'm studying for a marketing strategy.
My tenant tells me all I do is write the checks which is true. But I have to study and plan. No I'm not out in an ac cab doing any field work. But it's still a big worry. To sell the capital gains tax would be horrific, worse if they let the Bush tax cuts expire and if the bank interest rates weren't so abysmal, I figure I can get a little better return by going through the above. Each year brings variations in problems.
I won't know until after taxes next year how well I've done so far.